Briefly explain the purposes of adjustments.

Explain the relationship between adjustments and the following Chapter 3 concepts

the time period assumption,

the revenue recognition principle, and

the expense recognition principle.

On December 31, a company makes a $9,000 payment for renting a warehouse in January, February, and March of the following year. Show the accounting equation effects on December 31 as well as the adjustments required on January 31, February 28, and March 31

Match each each transaction with the type of adjustment (Accrual adjustment or Deferral adjustment)

Supplies for office were purchased during the year for $500, of which $100 remains on hand (unused) at year end. (Accrual or Deferral adjustment)

Interest of $250 of a note receivable was earned at year end, although collection of the interest is not due until the following year. (Accrual or Deferral adjustment)

At year end, salaries and wages payable of $3,600 had not been paid or recorded. (Accrual or Deferral adjustment)

At year end, one half of a $2,000 advertising project has been completed for a client, but nothing has been billed or collected. (Accrual or Deferral adjustment)

Redeemed a gift card for $600 of services. (Accrual or Deferral adjustment)